5.1 Can shares be acquired outside the bidding process? Profits are allocated on the basis of the joint enterprise agreement. Article 22 bis of Luxembourg`s income tax law provides for a shortlist of stock exchanges with book value, which may be fiscally neutral at the luxembourg shareholder level (i.e. no capital gains): in the case of a non-Luxembourg-based shareholder who sells the shares of a Luxembourg company, the capital gains resulting from the disposal of a significant stake (i.e. more than 10 per cent) are taxable in the Luxembourg company if the capital gains are realized within six months of the acquisition of the shares. Most of Luxembourg`s tax treaties prevent the taxation of Luxembourg (sources). A takeover bid in Luxembourg, as described above, requires notice when the buyer reaches a certain participation threshold. In addition, some rules also require ongoing or previous notifications to supervisory authorities. The sale of shares in a Luxembourg company may be tax-exempt if the seller is either a Luxembourg company free of capital or a non-resident. As a general rule, Luxembourg loses the right to tax capital gains from tax treaties and non-resident sellers who do not enjoy contractual protection when selling shares in a Luxembourg company are not taxable in Luxembourg at the end of a six-month holding period. What documents do buyers and sellers usually introduce when acquiring shares or a business or asset? Are there any differences between the documents used to acquire shares as opposed to a business or asset? If none of these provisions can be applied, the exchange of shares is in principle fully taxable. The private agreement may be formed by a number of legal mechanisms such as a letter of offer, an obligation to sell or, subsequently, a pre-sale and sale contract. 2.7 Should the same terms be offered to all shareholders? If not all shareholders of the target company are willing to sell at the offered price, the bidder must try to reach the 95% threshold to initiate a squeeze-out process.
But this is only possible in state-owned enterprises. There is no squeeze-out procedure for private companies in Luxembourg.